Question

The Field, Brown & Snow partnership was begun with investments by the partners as follows: Field, $129,100; Brown, $167,700; and Snow, $154,600. The operations did not go well, and the partners eventually decided to liquidate the partnership, sharing all losses equally. On May 31, after all assets were converted to cash and all creditors were paid, only $46,100 in partnership cash remained.

QS 12-9 Part 2

2. Assume that any partner with a deficit agrees to pay cash to the partnership to cover the deficit. Present the journal entries on May 31 to record (a) the cash receipt from the deficient partner(s) and (b) the final disbursement of cash to the partners.

Record the receipt of cash from the deficient partner(s).

Note: Enter debits before credits.

Transaction General Journal Debit Credit (a) Record the disbursement of the remaining cash to the partner(s). Note: Enter debits before credits. Transaction General Journal Debit Credit (b) Assume that any partner with a deficit is not able to reimburse the partnership. Present journal entries (a) to transfer the deficit of any deficient partners to the other partners and (b) to record the final disbursement of cash to the partners. Journal entry worksheet Record the transfer of the deficit of any deficient partner(s) to the other partner(s). Note: Enter debits before credits. Transaction General Journal Debit Credit (a) Journal entry worksheet Record the disbursement of the remaining cash to the partner(s). Note: Enter debits before credits. Transaction General Journal Debit Credit (b)

Answer 1

Total Capital contributed partners = $451400					Answer a
Share per partner = $451400 / 3 = $150466.67					Journal entry to record cash receipt from the deficient partner(s)
					Transaction	Account Title	Debit	Credit
Partner Name	Current Capital	Required Capital	Excess / (deficit)		a	Cash	$21,367
Field	$129,100	$150,467	-$21,367			Field's Capital		$21,367
Brown	$167,700	$150,467	$17,233
Snow	$154,600	$150,467	$4,133		Answer b
					Journal entry to record the disbursement of the remaining cash to the partner(s).
					Transaction	Account Title	Debit	Credit
					b	Field'S Capital	$22,489
						Brown's Capital	$22,489
						Snow's Capital	$22,489
						Cash		$67,467
					Answer a
					Journal entry to record the transfer of the deficit of any deficient partner(s) to the other partner(s).
					Transaction	Account Title	Debit	Credit
					a	Brown's Capital	$10,684
						Snow's Capital	$10,683
						Field's Capital		$21,367
					Answer b
					Journal entry to record the disbursement of the remaining cash to the partner(s).
					Transaction	Account Title	Debit	Credit
					b	Field'S Capital	$15,367
						Brown's Capital	$15,367
						Snow's Capital	$15,367
						Cash		$46,100